Differentiation: SMBs IT providers should almost never sell commodity products

If you are a small business, you cannot compete with commodity products.

Let’s dive into a fictional example;

You are a small business who sells iphone cables to your customers. It costs you $5 to sell a cable to a customer, but you can sell that cable for $25.

One day, people start buying their cables on eBay. They can buy 3 iPhone cables for $1, delivered to their door. For you to do the same, you would need to charge at least $50 to remain profitable.

Now, instead of competing with ebay on price, you decided to offer a power solution to your business customer. You sell a package where the customer gets a power bank, 3 cables, unlimited replacement cables, free power bank replacement and free monthly backup of your iphone for $29 a month.

It might work, it might not, but its got 100x better chance of working than selling something the same, just more inconvenient and expensive.

Are you trying to play with the giants

If I have seen further it is by standing on the shoulders of Giants. – Isaac Newton

Too many providers are out there trying reinvent the wheel to improve margins. I have spoken to a number of small businesses that proudly say “we host our own exchange server in house, we make awesome margins on it”

Ok, firstly, you don’t. So much time went into building the solution up, maintaining it, backing it up, power, emotional energy etc and you have like 500 customers on it. Say you can get $20 a mailbox for the service, you are generating $10k a month revenue. This quickly disappears in the first major downtime event where murphys law reigns supreme.

Imagine, some gun IT consultant (let’s call him Brenton) comes along and asks what the hell are you doing? For $30 a month, I can get you E3 licences that do email, but also include message encryption, 100% known malware detection, desktop office, 24×7 support, 99.9% SLA and all the cloud apps of Office 365. Hell if you don’t want the extra security or apps, the licences are $5 a piece.

Now, if the consultant has communicated the value proposition well enough (maybe using the dog picture above), the customer is going to change pronto to the new solution. Worse of all, they are going to realise that you have them on an inferior solution and may even have grounds to sue (depending on the circumstances, I’m not a lawyer)

Changing Focus

What if you spent all that time, energy, money, effort in building your solution stack on-top of Office 365, instead of trying to replace it?

Keep your focus fixed on getting the best customer outcome and figure out the smartest way to get there.

My ambition is to build up a strong suite of training materials and become the thought leader in leveraging these tools. I want customers to have the same superpowers I do so I can watch them delight their customers in ways they never thought possible.

Conclusion

It’s time to be a business consultant again. Stop showing your amazing technical prowess and start talking about business problems and business solutions. The tech is your super power that gives you the 10x + advantage over all the other consultants without it.

“There are no technology problems, there are only business problems with technology solutions.”